The Chancellor of the Exchequer, Rishi Sunak, detailed the onset of the economic emergency facing the UK at last week’s spending review. This comes at a time when demand for the government-backed CBILS loans is set to soar by UK businesses as their Bounce Back Loans dwindle and cash flow dries up, according to the latest MarketFinance business insights.
Of the businesses that applied for a Bounce Back loan (up to £50k) during the summer, they now have only £3,150 remaining and estimate that will see them through to the end of this week.
Since the announcement of the second national lockdown measures, a staggering 84% of businesses will be applying for CBILS loans. They indicated this would be used to protect them over prolonged lockdown measures and in anticipation of more bills, taxes or duties to pay. In addition to this, more businesses know they can refinance their Bounce Back Loan with a CBILS loan – up from 68% two months ago to 83% today.
Anil Stocker, CEO of MarketFinance, commented: “The stop-start government announcements on lockdowns haven’t helped UK businesses. However, they continue to fight on and will, naturally, require more funds to bolster them through a tricky winter period. Looking ahead, ultimately, it will be the private sector which will enable the Chancellor to get the country’s finances back under control, so business leaders will be looking for some pro-growth, pro-enterprise stimulus measures in time to come.”